Railroad operations and costing is one of RII's key areas of expertise. With hands-on experience managing railroad operations for both Class I and short line railroads, RII has extensive expertise for designing and costing railroad operations that benefit all parties involved, from facility switching, storage and interchange to lines hauls, branch lines, unit train operations and complete system analyses. Rail operations include unique costs and unique resources and indices for determining what those current costs are. RII has years of experience working with these costing indices and developing models to fit each individual operation to measure and/or optimize costs, values and performance. Understanding the costs allows RII to advise customers on developing or improving their own operations, measure costs or savings and to negotiate profitable agreements with other parties. A sample of services include (but are not limited to) the following:
Projects
Squaw Creek Switching Analyses
RII has assisted this short line railroad (and many others) to analyze taking over the switching operation for other facilities. RII develops the costs of operation at the facility with its unique short line model against the expected revenues to determine the profitability, the margin to be expected and test the rates that can be charged to achieve those margins. The model is especially helpful when multiple parameters can change such as traffic levels, rate requirements, service times, or margin requirements because it is flexible to be able to show the results from many angles. RII has been key helping short line railroads like Squaw Creek set rates that ensure profitability, adjust operation parameters in ways that work for all requirements and secure additional business lines.
Packaging Corporation of America Branch Line Analysis
RII developed several operational costing scenarios for this worldwide paper products manufacturer's facility in Counce, TN to assist with rail service efficiency and control of its traffic. The facility sits at the end of a branch line and was served by a Class I railroad. To compare the costs for a potential third party operator, RII developed the operational costs for switching the facility and costs for operating the entire branch line by the Class I railroad and by a third party short line for comparison.
BNSF Railway Terminal Analyses and Gulf Region Storage Iin Transit Capacity Analysis
RII conducted physical inspections, developed marketing plans, and financial and economic analyses for major BNSF terminals across the United States including West Seattle, WA, Denver, CO, Quad Cities, IA, Fargo, ND, Kansas City, MO, Cobourg, MO, Memphis, TN, Oklahoma City, OK, Omaha, NE, Klamath Falls, OR, and Dallas, TX. Each operation evaluation included a site inspection, customer interviews, financials and economics, traffic and operations review, and development of operational economics to determine asset disposition (who would most economically operate each asset aspect of the facilities: BNSF, 3rd party operated portions, contract switchers, short line operators, etc.]. Analysis involved working closely with multiple departments within the BNSF organization, making recommendations for restructuring and assisting with implementation.
RII also performed a broad feasibility study of the financial benefits that could be achieved by construction of a new yard on BNSF’s Gulf Division. Traffic on the Gulf Division has grown substantially and this growth is forecasted to continue. The particular focus of this study was to the Industrial Products business moving in regular train service to and from the Houston area. RII determined three viable locations for a new yard along with the capital costs for development. Operational modeling for each operation was performed for operations on expenses and potential cost savings. Research was compiled for traffic volumes by commodity including customer interviews, traffic data and growth forecasting of specific commodities. A cost/benefits analysis was also performed for the costs of construction against the benefits on traffic congestion, capacity and equipment/personnel utilization.
RII also performed a broad feasibility study of the financial benefits that could be achieved by construction of a new yard on BNSF’s Gulf Division. Traffic on the Gulf Division has grown substantially and this growth is forecasted to continue. The particular focus of this study was to the Industrial Products business moving in regular train service to and from the Houston area. RII determined three viable locations for a new yard along with the capital costs for development. Operational modeling for each operation was performed for operations on expenses and potential cost savings. Research was compiled for traffic volumes by commodity including customer interviews, traffic data and growth forecasting of specific commodities. A cost/benefits analysis was also performed for the costs of construction against the benefits on traffic congestion, capacity and equipment/personnel utilization.
Lakeview Railway Business Loss Case
RII was tasked with developing the loss of business damages for this case of contract breach for a short line railroad that had been replaced before its contract had expired. The assignment required vetting traffic on the line, including prospective business for likelihood, roll out schedule and traffic volumes. All commodities were researched for their industry growth factors and RII developed the existing, potential and expected growth of railroad traffic and revenue for the railroad for the remaining years of the contract. Then the operations costs were modeled against the revenues to determine the annual profit expected for the operation over the remaining life of the contract.
